Insider Sells Darden Restaurants Stock

Shares of Darden Restaurants Inc DRI fell by 0.8% from the previous closing price. SVP General Counsel Broad Matthew R filed a Form 4 with the SEC on Tuesday, March 30. The insider sold 4,700 shares at $145.00 on Monday, Mar 29, and sold 4,800 shares at $145.00 on Tuesday, Mar 30. After the transactions, the executive's stake in Darden Restaurants Inc. movedto 10,350 shares.

The Importance of Insider Transactions

While transactions from an insider shouldn't be used as the sole item to make an investment or trading decision, an insider buying or selling stock in their company can be a good added factor that leads to more conviction in a decision.

Insiders buying stock after a notable sell off can indicate an insider's long-term belief in the success of the company; insiders buying stock at new highs can be an indication the exec doesn't feel the stock is overvalued. Conversely, insiders who are selling stock at new lows can potentially indicate some kind of capitulation moment. Insiders selling at new highs can indicate that exec wants to "take some profit" and "lock in a gain."

Transaction Codes To Focus On

Investors prefer focusing on transactions which take place in the open market, indicated in the Form 4 with codes P for purchase and S for sale. An open-market transaction means the insider went into the market of their own volition and made an active decision about the potential path for a company and its stock moving forward.

Transaction codes besides P or S aren't relatively important as they are seldom tied to a decision by the executive. For example, transaction code A is indicative of an insider being forced to sell shares to attain compensation. Moreover, transaction code C indicates the conversion of an option.